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HYUNDAI MOBIS CO., LTD.
Separate Financial Statements
December 31, 2012 and 2011
(With Independent Auditors’ Report Thereon)
Contents
Page
Independent Auditors’ Report 1
Separate Statements of Financial Position 2
Separate Statements of Income 4
Separate Statements of Comprehensive Income 5
Separate Statements of Changes in Equity 6
Separate Statements of Cash Flows 7
Notes to the Separate Financial Statements 8
Independent Auditors’ Review Report on Internal Accounting Control System 65
Report on the Operations of Internal Accounting Control System 66
Independent Auditors’ Report
Based on a report originally issued in Korean
The Board of Directors and Stockholders
HYUNDAI MOBIS Co., Ltd.:
We have audited the accompanying separate statements of financial position of HYUNDAI MOBIS Co., Ltd. (the
“Company”) as of December 31, 2012 and 2011 and the related separate statements of income and comprehensive
income, changes in equity and cash flows for the years then ended. Management is responsible for the preparation and
fair presentation of these separate financial statements in accordance with Korean International Financial Reporting
Standards. Our responsibility is to express an opinion on these separate financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the separate financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the separate financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In our opinion, the separate financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2012 and 2011 and its financial performance and its cash flows for the years
then ended in accordance with Korean International Financial Reporting Standards.
Without qualifying our opinion, we draw attention to the following:
The procedures and practices utilized in the Republic of Korea to audit such separate financial statements may differ from
those generally accepted and applied in other countries. Accordingly, this report and the accompanying separate
financial statements are for use by those knowledgeable about Korean auditing standards and their application in practice.
KPMG Samjong Accounting Corp.
Seoul, Korea
February 22, 2013
This report is effective as of February 22, 2013, the audit report date. Certain subsequent events or circumstances,
which may occur between the audit report date and the time of reading this report, could have a material impact on the
accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should
understand that the above audit report has not been updated to reflect the impact of such subsequent events or
circumstances, if any.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Financial Position
As of December 31, 2012 and 2011
2
(In millions of won) Note 2012 2011
Assets
Cash and cash equivalents 4,36 W 662,949 1,186,260
Short-term financial instruments 5,36 2,964,000 1,210,000
Trade and other receivables 6,33,36 3,874,047 3,921,600
Inventories, net 7 797,289 788,026
Other current assets 8,36 130,611 62,911
Total current assets 8,428,896 7,168,797
Property, plant and equipment, net 9 1,997,911 1,837,597
Intangible assets, net 10 729,075 716,832
Investment property, net 11 66,616 71,230
Investment in associates, joint venture and
subsidiaries 12 6,865,658 6,572,259
Available-for-sale financial assets 13,36 95,371 86,757
Other non-current assets 5,6,14,36 56,617 72,982
Total non-current assets 9,811,248 9,357,657
Total assets W 18,240,144 16,526,454
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Financial Position, Continued
As of December 31, 2012 and 2011
3
(In millions of won) Note 2012 2011
Liabilities
Trade and other payables 15,33,36 W 2,334,381 2,230,990
Current portion of long-term debt and short-term
borrowings 18,36 1,158,773 1,711,134
Income taxes payable 31 323,960 258,652
Provisions for warranties 17 58,235 49,350
Other current liabilities 16,20,36 203,360 178,229
Total current liabilities 4,078,709 4,428,355
Bonds and long-term borrowings 18,36 - 99,762
Employee benefits 19 81,653 55,420
Provision for warranties 17 53,565 48,128
Deferred tax liabilities 31 613,131 590,252
Other non-current liabilities 16,20,36 459 25,993
Total non-current liabilities 748,808 819,555
Total liabilities 4,827,517 5,247,910
Equity
Capital stock 21 491,096 491,096
Capital surplus 21 1,385,743 1,385,743
Treasury stock 22 (121,688) (121,688)
Other equity 23 (6,773) (87,320)
Retained earnings 24,25 11,664,249 9,610,713
Total equity 13,412,627 11,278,544
Total liabilities and equity W 18,240,144 16,526,454
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Income
For the years ended December 31, 2012 and 2011
4
(In millions of won, except earnings per share information) Note 2012 2011
Revenue
26,33 W 16,865,694 15,886,201
Cost of sales 27,33 (13,420,601) (12,720,774)
Gross profit 3,445,093 3,165,427
Selling, general and administrative expenses 27,28,33 (1,132,727) (1,026,585)
Operating profit 2 2,312,366 2,138,842
Other income 29,30 136,203 187,791
Other expenses 29,30 (187,564) (171,915)
Finance income 30 609,005 327,979
Finance expenses 30 (92,091) (191,657)
Gain on disposal of investments in associates 12 58,942 -
Profit before income taxes 2,836,861 2,291,040
Income tax expense 31 (585,609) (548,298)
Profit for the year
W 2,251,252 1,742,742
Earnings per share
Basic earnings per share in won 32 W 23,558 18,258
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Comprehensive Income
For the years ended December 31, 2012 and 2011
5
(In millions of won) Note 2012 2011
Profit for the year
W 2,251,252 1,742,742
Other comprehensive income (loss):
Change in fair value of available-for-sale financial assets,
net of tax 13,23,31 6,443 (35,804)
Effective portion of changes in fair value of cash flow
hedges, net of tax 20,23,31 74,104 (30,899)
Defined benefit plan actuarial losses, net of tax 19,24,31 (30,480) (10,396)
50,067 (77,099)
Total comprehensive income for the year W 2,301,319 1,665,643
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Change in Equity
For the years ended December 31, 2012 and 2011
6
(In millions of won) Capital
stock Capital surplus Treasury stock
Other
equity
Retained
earnings
Total
equity
Balance at January 1, 2011 W 491,096 1,359,252 (130,896) (20,618) 8,021,507 9,720,341
Comprehensive income (net of tax):
Profit for the year - - - - 1,742,742 1,742,742
Change in fair value of available-for-sale
financial assets - - - (35,804) - (35,804)
Effective portion of changes in fair value
of cash flow hedges - - - (30,899) - (30,899)
Defined benefit plan actuarial losses - - - - (10,396) (10,396)
Total comprehensive income for the
year - - - (66,703) 1,732,346 1,665,643
Transactions with owners of the Company, recognized directly in equity:
Disposal of treasury stock - 26,491 9,208 1 - 35,700
Dividends - - - - (143,140) (143,140)
Total transactions with owners of the
Company - 26,491 9,208 1 (143,140) (107,440)
Balance at December 31, 2011 W 491,096 1,385,743 (121,688) (87,320) 9,610,713 11,278,544
Balance at January 1, 2012 W 491,096 1,385,743 (121,688) (87,320) 9,610,713 11,278,544
Comprehensive income (net of tax):
Profit for the year - - - - 2,251,252 2,251,252
Change in fair value of available-for-sale
financial assets - - - 6,443 - 6,443
Effective portion of changes in fair value
of cash flow hedges - - - 74,104 - 74,104
Defined benefit plan actuarial losses - - - - (30,480) (30,480)
Total comprehensive income for the
year - - - 80,547 2,220,772 2,301,319
Transactions with owners of the Company, recognized directly in equity:
Dividends - - - - (167,236) (167,236)
Total transactions with owners of the
Company - - - - (167,236) (167,236)
Balance at December 31, 2012 W 491,096 1,385,743 (121,688) (6,773) 11,664,249 13,412,627
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Separate Statements of Cash Flows
For the years ended December 31, 2012 and 2011
7
(In millions of won) Note 2012 2011
Cash flows from operating activities
Cash generated from operations 35 W 2,668,346 1,751,520
Interest received 115,689 71,153
Interest paid (26,526) (40,828)
Dividends received 338,546 116,819
Income tax paid (502,405) (442,180)
Net cash provided by operating activities 2,593,650 1,456,484
Cash flows from investing activities
Increase in short-term financial instruments, net (1,725,000) (960,000)
Increase in long-term financial instruments, net - (25,000)
Disposal of available-for-sale financial assets 28 940
Acquisition of available-for-sale financial assets (157) (1,326)
Disposal of investments in associates and subsidiaries 120,375 -
Acquisition of investments in associates and subsidiaries (354,832) (1,262,068)
Disposal of property, plant and equipment 4,574 8,392
Acquisition of property, plant and equipment (345,212) (310,054)
Acquisition of intangible assets (23,433) (21,290)
Disposal of investment property 2,551 -
Acquisition of investment property - (1,341)
Decrease (increase) in deposits provided, net 5,211 (5,480)
Decrease (increase) in guarantee deposits, net 995 (2,627)
Net cash used in investing activities (2,314,900) (2,579,854)
Cash flows from financing activities
Increase (decrease) in short-term borrowings, net (434,823) 400,949
Repayment of current portion of long-term debt (200,000) -
Dividends paid (167,236) (143,140)
Net cash provided by (used in) financing activities (802,059) 257,809
Effect of currency exchange rate fluctuation on cash and cash
equivalents (2) 1
Net decrease in cash and cash equivalents (523,311) (865,560)
Cash and cash equivalents at the beginning of year 1,186,260 2,051,820
Cash and cash equivalents at the end of year W 662,949 1,186,260
See accompanying notes to the separate financial statements.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
8
1. General Description of the Company
HYUNDAI MOBIS Co., Ltd. (the “Company”) engages in the auto parts business, mainly manufacturing parts and
modules, for car production, after-sales services, and others. The shares of the Company have been listed on the
Korea Stock Exchange since 1989.
The main office is located in Seoul, and its module factories are located in Ul-San, Kyoung-In and Chung-Cheong,
Republic of Korea. The Company also has a lab located in Yong-In, Republic of Korea.
The Company’s common stockholders as of December 31, 2012 and 2011 are as follows:
2012 2011
Stockholders
Number of
shares
Percentage of
ownership
Number of
shares
Percentage of
ownership
KIA Motors Corporation 16,427,074 16.88% 16,427,074 16.88%
Mong-Ku Chung 6,778,966 6.96% 6,778,966 6.96%
Hyundai Steel Company 5,504,846 5.66% 5,504,846 5.66%
Hyundai Glovis Co., Ltd. 656,293 0.67% 656,293 0.67%
Treasury stock 1,806,616 1.86% 1,806,615 1.86%
Others 66,170,068 67.97% 66,170,069 67.97%
97,343,863 100.00% 97,343,863 100.00%
2. Basis of Preparation
(1) Statement of compliance The separate financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”) as prescribed in the Act on External Audit of Corporations in the Republic of Korea.
These financial statements are separate financial statements prepared in accordance with K-IFRS No.1027, ‘Consolidated and Separate Financial Statements’ presented by a parent, an investor in an associate or a venture in a jointly controlled entity, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.
(2) Basis of measurement
The separate financial statements have been prepared on the historical cost basis, except for descriptions mentioned in notes separately.
(3) Functional and presentation currency
These separate financial statements are presented in Korean won, which is the Company’s functional currency and the currency of the primary economic environment in which the Company operates.
(4) Use of estimates and judgments
The preparation of the separate financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Information about critical assumptions and estimates is included in note 3(20).
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
9
2. Basis of Preparation, Continued
(5) Changes in accounting policies
① Changes in accounting policies
- Financial Instruments: Disclosures The Company has applied the amendments to K-IFRS No.1107, ‘Financial Instruments: Disclosures’ since January 1, 2012. The amendments require disclosing the nature of transferred assets, their carrying amount, and the description of risks and rewards for each class of transferred financial assets that are not derecognized in their entirety. If the Company derecognizes transferred financial assets but still retains their specific risks and rewards, the amendments require additional disclosures of their risks.
- Deferred tax associated with investment property
The Company has adopted Deferred Tax: Recovery of Underlying Assets (Amendments to K-IFRS No.1012, ‘Income
Tax’) since January 1, 2012 and changed its accounting policy for measuring deferred tax for investment property
accounted for under the fair value model. Deferred tax assets or liabilities related to investment property measured at
fair value model, unless any contrary evidence exists, are measured using the assumption that the carrying amount of the
property will be recovered entirely through sale.
- Presentation of financial statements
The Company adopted the amendments to K-IFRS No. 1001, ‘Presentation of Financial Statements’ from the annual
period ended December 31, 2012. The Company’s operating profit is calculated as revenue less: (1) cost of goods sold,
and (2) selling, general and administrative expenses, and is presented separately in the statement of income.
② Impact of change in accounting policy
The Company retrospectively applied the amendment to K-IFRS No. 1001, for which the impact is as follows:
(In millions of won) 2012 2011
Operating profit before adoption of the amendment W 2,261,005 2,154,718
Changes :
Other income (note 29) (136,203) (187,791)
Other expenses (note 29) 187,564 171,915
Operating profit after adoption of the amendment W 2,312,366 2,138,842
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
10
3. Significant Accounting Policies
The significant accounting policies applied by the Company in preparation of its separate financial statements are included below. The accounting policies set out below have been applied consistently to all periods presented in these separate financial statements except those as disclosed in note 2 (5). Certain amounts in prior year were reclassified to conform to current year presentation. Such reclassification has no impact on net assets or net income.
(1) Investments in subsidiaries and associates
The separate financial statements are prepared and presented in accordance with K-IFRS No. 1027 ‘Consolidated and Separate Financial Statements’. The Company applied cost method to investments in subsidiaries, associates and joint venture in accordance with K-IFRS No. 1027.
(2) Operating segment
The Company discloses information related to operating segment in accordance with K-IFRS No. 1108 ‘Operating Segment’ in its consolidated financial statements.
(3) Foreign currencies
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions or that of valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the separate statement of income. Foreign exchange gains and losses related to borrowings and cash and cash equivalents are presented in the separate statement of income within financial income or expenses. All other foreign exchange gains and losses are presented in the separate statement of income within other operating income or expenses.
(4) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and are used by the Company in management of its short-term commitments.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
11
3. Significant Accounting Policies, Continued
(5) Non-derivative financial instruments
① Classification The Company classifies its financial instruments in the following categories: financial assets and liabilities at fair value through profit or loss, loans and receivables, available-for-sale financial assets, held-to-maturity investments, and other financial liabilities at amortized cost. The classification depends on the purpose for which the financial instruments were acquired and the nature of the instruments. Management determines the classification of its financial instruments at initial recognition.
- Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities at fair value through profit or loss are financial instruments held for trading. Financial assets and liabilities are classified in this category if acquired principally for the purpose of selling or repurchasing it in the near term.
- Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in non-current assets, except for those with maturities less than 12 months after the end of the reporting period, which are classified as current assets.
- Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
- Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.
- Financial liabilities measured at amortized cost
The Company classifies non-derivative financial liabilities as financial liabilities measured at amortized cost except for financial liabilities at fair value through profit or loss. Financial liabilities measured at amortized cost are included in non-current liabilities, except for maturities less than 12 months after the end of the reporting period, which are classified as current liabilities.
② Recognition and measurement Regular purchases and sales of financial assets are recognized on the trade date. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss is initially recognized at fair value, and transaction costs are expensed in the statement of income. Financial assets are derecognized when the rights to receive cash flows from the investments have been expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Unless the transferred financial assets meet criteria for recognition, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for consideration received. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the separate statement of income within ‘financial income/costs’ in the period in which they arise.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
12
3. Significant Accounting Policies, Continued
(5) Non-derivative financial instruments, continued
② Recognition and measurement, continued Changes in the fair value of monetary and non-monetary securities classified as available-for-sale financial assets are recognized in equity. When securities classified as available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments recognized in equity are presented in the separate statement of income within ‘finance income/costs’. Interest on held-to-maturity financial assets is recognized in the separate statement of income as part of ‘finance income’. Dividends on available-for-sale equity instruments are presented in the separate statement of income as part of ‘finance income’ when the Company’s right to receive payments is established. ③ Impairment of financial assets The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. These events include the case where the issuer of financial assets goes bankrupt or has solvency problem, not able to pay for interest and principal, the terms and conditions of borrowings is eased due to financial difficulty of the borrower, active market ceases to exist, and others. As for particular financial assets such as account receivables, assets which are not considered to be individually impaired, the Company subsequently go through collective assessment of impairment. For the financial assets measured at acquisition cost, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. An impairment loss in respect of a financial assets measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate. The Company can recognize impairment losses directly or establish a provision to cover impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the previously recognized impairment loss shall be reversed either directly or by adjusting an allowance account. In case of equity investments classified as available-for-sale financial assets, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, is removed from equity and recognized in the separate statement of income. Impairment losses recognized in the statement of income on equity instruments are not reversed through the separate statement of income. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale financial assets increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through the separate statement of income.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
13
3. Significant Accounting Policies, Continued
(6) Derivative financial instruments
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Recognition of related gain and loss depends on whether derivative instruments are designated to hedge, and if designated to hedge, it depends on characteristics of hedged items. On initial designation of the hedge, the Company formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Company makes an assessment, both at the inception of the hedge relationship as well as on a quarterly basis, whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the cash flows of the respective hedged items during the period for which the hedge is designated.
When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.
(7) Inventories
The cost of inventories is determined by the monthly weighted-average method for merchandise, finished goods,
work-in-progress, raw material and supplies, and by the moving-average method for auto parts for after-sales service,
and by the specific identification method for materials in transit. Inventories are measured at the lower of cost and net
realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less applicable
variable selling expenses. The Company periodically reviews signs of impairment of inventories, and if impairment is
identified due to excess, obsolescence, and inutility, the losses on valuation of inventories are recognized reduction to
inventories in separate statement of financial position, and are charged to cost of sales. The amount of any reversal of
any write-down of inventories, arising from an increase in net realizable value, are recognized as a reduction in the
amount of inventories recognized as an expense in the period in which the reversal occurs.
(8) Property, plant and equipment
Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent to initial recognition, property, plant and equipment, except for land, are carried at its cost less any accumulated depreciation and any accumulated impairment losses. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the separate statement of income during the financial period in which they are incurred.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
14
3. Significant Accounting Policies, Continued
(8) Property, plant and equipment, continued
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method over their estimated useful lives, as follows:
Useful lives (years)
Buildings and structures 30
Machinery and equipment 5 ~ 15
Tools 5
Furniture and fixtures 5
Vehicles 5 ~ 15
Useful lives, depreciation method and residual values are reviewed at the end of each reporting period and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s estimated recoverable amount is smaller than its carrying amount. Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within ‘other income or expenses’ in the separate statement of income.
(9) Borrowing costs
The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale. Financial assets and inventories that are manufactured or otherwise produced over a short period of time are not qualifying assets. Assets that are ready for their intended use or sale when acquired are not qualifying assets. To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense. To the extent that the Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be the weighted average of the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs that the Company capitalizes during a period shall not exceed the amount of borrowing costs incurred during that period.
(10) Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to costs are deferred and recognized in the statement of income over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to property, plant and equipment are presented as a deduction to related assets and are credited to depreciation over the estimated useful lives of the related assets.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
15
3. Significant Accounting Policies, Continued
(11) Intangible assets
Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses. Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. As there are no foreseeable limits to the periods over which certain intangible assets are expected to be available for use, those intangible assets are determined as having indefinite useful lives and not amortized.
Useful lives (years)
Development costs 5
Software 5
Industrial property rights 5 ~ 10
Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes are accounted for as changes in accounting estimates.
① Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets acquired. When the excess is negative, bargain purchase gain is recognized immediately in profit or loss. Goodwill is not amortized and stated at book value less accumulated impairment loss.
② Development costs Costs that are identifiable, controllable and directly attributable to development projects are recognized as intangible assets when the following criteria are met:
- It is technically feasible to complete the development project so that it will be available for use; - Management intends to complete the development project and use or sell it; - There is an ability to use or sell the development project; - It can be demonstrated how the development project will generate probable future economic benefits; - Adequate technical, financial and other resources to complete the development and to use or sell the development
project are available; and -The expenditure attributable to the development project during its development can be reliably measured.
Capitalized development costs that are recognized as intangible assets are amortized using the straight-line method over their estimated useful lives from the date that they are available for use or sale. Other development expenditures that do not meet these criteria are recognized in profit or loss as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
16
3. Significant Accounting Policies, Continued
(11) Intangible assets, continued
③ Membership rights Membership rights are regarded as intangible assets with indefinite useful lives and not amortized as there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. All membership rights are tested annually for impairment and stated at cost less accumulated impairment losses.
(12) Investment property
Property held for the purpose of earning rentals or benefiting from capital appreciation or for both is classified as investment property. If some portion of property is held for the purpose of owner-occupation and cannot be separated by portions to dispose and the owner-occupied portion is immaterial, it is classified as investment property. Investment property is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated. Depreciation on the investment property except for land is calculated using the straight-line method to allocate their cost less residual values over 30 years. Useful lives, depreciation method and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change of useful lives and residual values is accounted for as a change in an accounting estimate.
(13) Impairment of non-financial assets
Assets that have an indefinite useful life, such as goodwill, are not subject to amortization and are tested for impairment annually. Assets that are subject to amortization or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. The Company estimates the recoverable amount of an individual asset, if it is impossible to measure the individual recoverable amount of an asset, then the Company estimates the recoverable amount of cash-generating unit (“CGU”). An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. Non-financial assets other than goodwill for which impairment is recognized are reviewed for possible reversal of the impairment at each reporting date.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
17
3. Significant Accounting Policies, Continued
(14) Employee benefits ① Short-term employee benefits Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render the related service. When an employee has rendered service to the Company during an accounting period, the Company recognizes the benefits in separate statement of income. ② Retirement benefits: defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of plan assets is deducted. The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from actuarial assumption changes and experiential adjustments in other comprehensive income when incurred.
(15) Provisions and contingent liabilities
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Contingent liabilities are: - A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, or - A present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or - The amount of the obligation cannot be measured with sufficient reliability.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
18
3. Significant Accounting Policies, Continued
(16) Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it is related to a business combination, or items recognized directly in equity or in other comprehensive income.
① Current tax Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.
② Deferred tax Deferred tax is recognized, using the asset-liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which they can be utilized. However, deferred tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income. The Company recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. The Company recognizes a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries and associates, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period, the amount is reduced if it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention either to settle the balances on a net basis or to realize the asset and settle the liability simultaneously.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
19
3. Significant Accounting Policies, Continued
(17) Revenue recognition
Revenue is measured as the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and when specific criteria have been met for each of the Company’s activities as described below.
① Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.
② Interest income Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Company reduces the carrying amount to its recoverable amount. Interest income on impaired receivables is recognized using the original effective interest rate.
③ Royalty income Royalty income is recognized on an accrual basis in accordance with the substance of the relevant agreement.
④ Dividend income Dividend income is recognized when the right to receive payment is established.
⑤ Rental income Rental income from investment property is recognized in profit on a straight-line basis.
(18) Dividend
Dividend liability is recognized in the separate statement of financial position when the dividends are approved by the Company’s shareholders.
(19) Earnings per share
The Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
20
3. Significant Accounting Policies, Continued
(20) Significant accounting estimates and judgments
The Company makes estimates and assumptions concerning the future. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, differ from actual results. The significant estimates and assumptions and those which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities after the end of the reporting period are addressed below.
① Fair value of derivative and other financial instruments The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
② Recoverable amount of trade receivables The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment.
③ Recoverable amount of non-current assets The carrying amounts of the Company’s non-current assets are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. ④ The residual value and the useful life of property, plant and equipment, intangible asset and investment property. The residual value and the useful life of an asset shall be reviewed at least at each financial year-end. Considering physical/technical obsolescence, and usability, prospective usable years and estimated recoverable value at the date of disposal are reviewed. If expectations differ from previous estimates, the change shall be accounted for as a change in an accounting estimate. ⑤ Defined benefit obligations The Company is taking defined benefit plan for post-employment benefit. The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The Company determines the appropriate discount rate at the end of each year. This is the interest rate that is used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit obligations. Other key assumptions for defined benefit obligations are based in part on current market conditions.
⑥ Impairment of goodwill The Company tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates.
⑦ Provision for warranties The Company recognizes provision for expected expenditures based on the warranty period (1~5 years) and past experience rate by warranty, exchange, refund, defect repair and after-service for merchandises and finished goods.
⑧ Income taxes The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be levied. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.
3. Significant Accounting Policies, Continued
(21) New standards and interpretations not yet adopted
The following new standards, interpretations and amendments to existing standards have been published and are mandatory for the Company for annual periods beginning after January 1, 2012, and the Company has not early adopted
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
21
them. Management believes the impact of the amendments on the Company’s separate financial statements is not significant.
① Amendments to K-IFRS No. 1019, ‘Employee Benefits’
The standard requires recognition of actuarial gains and losses immediately in other comprehensive income and to
calculate expected return on plan assets based on the rate used to discount the defined benefit obligation. The standard
will be applied retrospectively for the Company’s annual periods beginning on or after January 1, 2013.
② K-IFRS No. 1113, ‘Fair Value Measurement’ The standard defines fair value and a single framework for fair value, and requires disclosures about fair value
measurements. The standard will be applied prospectively for the Group’s annual periods beginning on or after
January 1, 2013. ③ Amendments to K-IFRS No. 1001, ‘Presentation of Financial Statements’ The amendments require presenting in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendment is mandatorily effective for annual periods beginning on or after July 1, 2012.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
22
4. Cash and Cash Equivalents
Cash and cash equivalents as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Cash on hand W 62 62
Bank deposits and others 662,887 1,186,198
W 662,949 1,186,260
5. Restricted Deposits
Financial instruments which are restricted in use as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011 Description
Short-term financial instruments W 50,000 - Win-Win cooperation deposits
Long-term financial instruments 23 23 Bank account deposits
- 29,000 Win-Win cooperation deposits
W 50,023 29,023
6. Trade and Other Receivables
(1) Trade and other receivables as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Accounts and notes receivable - trade W 3,839,037 3,907,565
Accounts and notes receivable - other 35,544 14,474
3,874,581 3,922,039
Less : non-current
Long-term accounts and notes receivable - trade (534) (439)
W 3,874,047 3,921,600
Trade and other receivables from related parties as of December 31, 2012 and 2011 are W 3,170,834 million and W
3,250,112 million, respectively. The Company transferred certain accounts and notes receivable amounted to W
1,058,854 million to several financial institutions with recourse and treated them as borrowings as of December 31,
2012 (note 18).
The Company derecognizes accounts and notes receivables which are transferred without recourse. The amounts of
accounts and notes receivable which are not due as of December 31, 2012, and losses on sale of accounts and notes
receivable for the year then ended are W 307,050 million and W 1,788 million, respectively.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
23
6. Trade and Other Receivables, Continued
(2) The Company recognized an allowance for doubtful accounts amounting to W 6,561 million based on individual
analysis for receivables impaired as of December 31, 2012. In addition, the Company recognized an allowance
for doubtful accounts amounting to W 1,222 million based on collective assessment of impairment based on past
experience for group of assets with similar credit risk.
Changes in allowance for doubtful accounts for the years ended December 31, 2012 and 2011 are as follows:
(In millions of won) 2012 2011
Balance at January 1 W 7,945 9,987
Reversal (162) (1,623)
Write-off - (419)
Balance at December 31 W 7,783 7,945
(3) The aging of trade and other receivables as of December 31, 2012 and 2011 are as follows:
① As of December 31, 2012
(In millions of won)
Carrying
amount
6 months
or less
6-12
months
1-3
years
More than
3 years
Accounts and notes receivable - trade W 3,840,192
3,838,474
1,430
116
172
Allowance for doubtful accounts (1,155)
(983)
-
-
(172)
3,839,037
3,837,491
1,430
116
-
Accounts and notes receivable - other
42,172
35,495
287
5,439
951
Allowance for doubtful accounts (6,628)
(232)
(6)
(5,439)
(951)
35,544
35,263
281
-
-
W 3,874,581
3,872,754
1,711
116
-
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
24
6. Trade and Other Receivables, Continued
(3) The aging of trade and other receivables as of December 31, 2012 and 2011 are as follows, continued:
② As of December 31, 2011
(In millions of won)
Carrying
amount
6 months
or less
6-12
months
1-3
years
More than
3 years
Accounts and notes receivable - trade W 3,908,784
3,905,791
1,498
1,323
172
Allowance for doubtful accounts (1,219)
(1,045)
-
(2)
(172)
3,907,565
3,904,746
1,498
1,321
-
Accounts and notes receivable - other
21,200
14,772
-
5,439
989
Allowance for doubtful accounts (6,726)
(335)
-
(5,439)
(952)
14,474
14,437
-
-
37
W 3,922,039
3,919,183
1,498
1,321
37
7. Inventories
Inventories as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Acquisition
cost
Provision
for loss on
valuation
Carrying
amount
Acquisition
cost
Provision
for loss on
valuation
Carrying
amount
Merchandises W 479,966 (7,906) 472,060 516,702 (10,665) 506,037
Finished goods 31,482 (1,957) 29,525 24,910 (1,507) 23,403
Work-in- progress 73,929 (2,597) 71,332 64,746 (1,701) 63,045
Raw materials 136,142 (4,066) 132,076 118,987 (4,743) 114,244
Supplies 15,730 - 15,730 12,388 - 12,388
Materials-in- transit 55,617 - 55,617 57,611 - 57,611
Outsourcing 20,949 - 20,949 11,298 - 11,298
W 813,815 (16,526) 797,289 806,642 (18,616) 788,026
The amounts of reversal of provision as deducted from cost of sales for the years ended December 31, 2012 and 2011
are W 2,090 million and W 4,110 million, respectively.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
25
8. Other Current Assets
Other current assets as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Accrued income W 26,311 16,467
Advance payments - 2,761
Prepaid expenses 7,049 11,091
Financial derivative assets 50,273 8,054
Prepaid value added tax 46,978 24,538
W 130,611 62,911
9. Property, Plant and Equipment
(1) Property, plant and equipment as of December 31, 2012 and 2011 are summarized as follows:
① As of December 31, 2012
(In millions of won) Land Buildings Structures Machinery Tools
Furniture
and fixture
Vehicles
Construction
-in-progress Total
Acquisition
costs W 707,147 720,817 43,467 905,468 200,248 147,821 62,419 36,717 2,824,104 Accumulated
depreciation - (145,511) (8,888) (434,340) (117,081) (87,173) (32,421) - (825,414)
Government grant - - - (667) (81) - (31) - (779)
Carrying
amount W 707,147 575,306 34,579 470,461 83,086 60,648 29,967 36,717 1,997,911
② As of December 31, 2011
(In millions of won) Land Buildings Structures Machinery Tools
Furniture
and fixture
Vehicles
Construction
-in-progress Total
Acquisition
costs W 698,439 629,214 36,422 711,396 165,203 113,800 60,438 90,057 2,504,969 Accumulated
depreciation - (120,619) (7,358) (337,944) (96,665) (74,386) (29,702) - (666,674)
Government grant - - - (681) (17) - - - (698)
Carrying
amount W 698,439 508,595 29,064 372,771 68,521 39,414 30,736 90,057 1,837,597
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
26
9. Property, Plant and Equipment, Continued
(2) Changes in property, plant and equipment for the years ended December 31, 2012 and 2011 are summarized as
follows:
① For the year ended December 31, 2012
(In millions of won)
Beginning
balance
Acquisition
(*1) Disposal Depreciation Others(*2)
Ending
balance
Land W 698,439 9,295 (1,332) - 745 707,147
Buildings 508,595 20,525 - (24,893) 71,079 575,306
Structures 29,064 1,286 (2) (1,531) 5,762 34,579
Machinery 372,771 31,983 (2,295) (102,929) 170,931 470,461
Tools 68,521 24,840 (923) (23,583) 14,231 83,086
Furniture and
fixture 39,414 23,849 (207) (15,617) 13,209 60,648
Vehicles 30,736 4,397 (253) (4,918) 5 29,967
Construction-
in -progress 90,057 230,314 - - (283,654) 36,717
W 1,837,597 346,489 (5,012) (173,471) (7,692) 1,997,911
(*1) Borrowing costs amounting to W 1,277 million are capitalized.
(*2) Others include reclassification of construction-in-progress and reclassification between accounts.
② For the year ended December 31, 2011
(In millions of won)
Beginning
balance
Acquisition
(*1) Disposal Depreciation Others(*2)
Ending
balance
Land W 671,794 32,466 (6,719) - 898 698,439
Buildings 500,832 15,067 (128) (23,393) 16,217 508,595
Structures 28,057 1,581 (118) (1,406) 950 29,064
Machinery 338,425 72,467 (1,509) (86,184) 49,572 372,771
Tools 50,015 34,978 (548) (20,788) 4,864 68,521
Furniture and
fixture 29,908 22,749 (202) (14,630) 1,589 39,414
Vehicles 30,995 4,711 (215) (4,755) - 30,736
Construction-
in -progress 42,140 126,474 - - (78,557) 90,057
W 1,692,166 310,493 (9,439) (151,156) (4,467) 1,837,597
(*1) Borrowing costs amounting to W 439 million are capitalized.
(*2) Others include reclassification of construction-in-progress and reclassification between accounts.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
27
10. Intangible Assets
(1) Changes in intangible assets for the years ended December 31, 2012 and 2011 are summarized as follows:
① For the year ended December 31, 2012
(In millions of won)
Beginning
balance
Acquisition
(*1) Amortization Disposals
Impairment
losses Others(*2)
Ending
balance
Goodwill W 588,395 - - - - - 588,395
Industrial
property rights 2,858 683 (628) - (63) - 2,850
Development
costs 22,683 10,653 (6,114) - - - 27,222
Software 31,402 12,253 (11,754) (14) - 7,692 39,579
Membership 71,494 362 - - (827) - 71,029
W 716,832 23,951 (18,496) (14) (890) 7,692 729,075
(*1) Borrowing costs amounting to W 518 million are capitalized.
(*2) Others include reclassification from construction-in-progress.
② For the year ended December 31, 2011
(In millions of won)
Beginning
balance
Acquisition
(*1) Amortization Disposals
Impairment
losses Others(*2)
Ending
balance
Goodwill W 588,395 - - - - - 588,395
Industrial
property rights 2,871 645 (602) - (56) - 2,858
Development
costs 23,624 8,264 (8,841) - - (364) 22,683
Software 29,669 12,238 (14,972) - - 4,467 31,402
Membership 71,601 241 - - (348) - 71,494
W 716,160 21,388 (24,415) - (404) 4,103 716,832
(*1) Borrowing costs amounting to W 98 million are capitalized.
(*2) Others include reclassification from construction-in-progress and reclassification between accounts.
(2) Research and development costs recorded in profit or loss the years ended December 31, 2012 and 2011 are W
359,099 million and W 319,987 million, respectively.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
28
10. Intangible Assets, Continued
(3) Goodwill impairment
Goodwill, which amounts to W 588,395 million was acquired in a business combination with Hyundai Autonet Co.,
Ltd. This amount was allocated to module and part manufacturing division, one of the CGUs. The Company reviews
annually whether any impairment is identified.
The recoverable amounts of CGUs have been determined based on value in use using pre-tax cash flow projections
based on financial budgets covering a five-year period. Discount rate used for value in use calculations is 11.9%.
Cash flows beyond the five-year period are estimated by using 0% of expected growth rate. As a result of the
impairment test, no impairments were recognized for the year ended December 31, 2012.
Principal assumptions
Criteria used to determine principal assumptions
Gross profit ratio on sales
Applying gross profit ratio on sales of last year
Growth rate of sales
Considering same industry’s sales growth rate of last five years
11. Investment Property
(1) Investment property as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Land Buildings Land Buildings
Acquisition costs W 37,348 36,061 40,268 36,061
Accumulated depreciation - (6,793) - (5,099)
Carrying amount W 37,348 29,268 40,268 30,962
(2) Changes in investment property for the years ended December 31, 2012 and 2011 are summarized as follows:
① For the year ended December 31, 2012
(In millions of won) Beginning balance Disposals Depreciation
Ending
balance
Land W 40,268 (2,920) - 37,348
Buildings 30,962 - (1,694) 29,268
W 71,230 (2,920) (1,694) 66,616
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
29
11. Investment Property, Continued
(2) Changes in investment property for the years ended December 31, 2012 and 2011 are summarized as follows,
continued:
② For the year ended December 31, 2011
(In millions of won) Beginning balance Acquisition Depreciation
Ending
balance
Land W 39,605 663 - 40,268
Buildings 31,978 678 (1,694) 30,962
W 71,583 1,341 (1,694) 71,230
(3) The fair value of investment property as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Land W 36,685 39,605
Buildings 32,835 32,835
W 69,520 72,440
(4) The amount recognized in profit or loss from investment property for the years ended December 31, 2012 and 2011
are summarized as follows:
(In millions of won) 2012 2011
Rental income W 4,467 4,577
Operating expense (2,453) (2,324)
W 2,014 2,253
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
30
12. Investment in Associates, Joint Venture and Subsidiaries
(1) Investment in subsidiaries as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Company
Location
Business
Ownership
(%)
Carrying
amount
Ownership
(%)
Carrying
amount
Hyundai IHL Co., Ltd. Korea
Manufacturing the auto lighting
and electric apparatus 90.00% W 33,213 90.00% W 33,213
Hyundai Life Insurance Co.,
Ltd.(*1) Korea Life Insurance 58.61% 208,370 - -
Hyundai Motor (Shanghai) Co.,
Ltd. China Sales of auto-parts 100.00% 18,228 100.00% 18,228
Shanghai Hyundai Mobis
Automotive Parts Co., Ltd. China
Manufacturing and sales of
auto-parts 100.00% 163,741 87.50% 120,009
Jiangsu Mobis Automotive Parts
Co., Ltd. China
Manufacturing and sales of
auto-parts 100.00% 96,915 100.00% 96,915
Beijing Hyundai Mobis
Automotive Parts Co., Ltd. China
Manufacturing and sales of
auto-parts 100.00% 223,061 100.00% 223,061
Beijing Mobis Chonche
Automotive Parts Co., Ltd. China
Manufacturing and sales of
auto-parts 60.00% 17,304 60.00% 17,304
Wuxi Mobis Automotive Parts
Co., Ltd.(*2) China
Manufacturing and sales of
auto-parts 33.75% 24,814 33.75% 24,814
Tianjin Mobis Automotive Parts
Co., Ltd. China
Manufacturing and sales of
auto-parts 100.00% 20,600 100.00% 20,600
Mobis Parts Middle East FZE UAE Sales of auto-parts 100.00% - 100.00% -
Hyundai Mobis (Hongkong) Co.,
Limited. Hongkong Sales of auto-parts 100.00% - 100.00% -
Mobis America Inc. USA
Manufacturing and sales of
auto-parts 100.00% 195,332 100.00% 195,332
American Autoparts, Inc. USA Manufacturing and sales of
auto-parts 100.00% 19,637 100.00% 19,637
Mobis Parts Europe N.V. Belgium Sales of auto-parts 100.00% 59,107 100.00% 31,151
Mobis Parts Australia PTY., Ltd. Australia Sales of auto-parts 100.00% 25,159 100.00% 25,159
Mobis Slovakia s.r.o. Slovakia
Manufacturing and sales of
auto-parts 100.00% 33,213 100.00% 33,213
Mobis Automotive and Module
Industry Trade Co. - Joint
Stock Company(*3) Turkey
Manufacturing and sales of
auto-parts 100.00% 17,044 - -
Mobis India, Ltd. India
Manufacturing and sales of
auto-parts 100.00% 89,389 100.00% 88,464
Mobis India Research and
Development Private
Limited(*4) India
Manufacturing and sales of
auto-parts - - 100.00% 925
Mobis Automotive Czech s.r.o. Czech
Manufacturing and sales of
auto-parts 100.00% 20,503 100.00% 20,503
Mobis Module CIS, LLC(*5) Russia Manufacturing and sales of
auto-parts 99.00% 50,676 99.00% 39,546
Mobis Brasil Fabricacao De
Auto Pecas Ltda Brazil
Manufacturing and sales of
auto-parts 100.00% 61,367 100.00% 34,883
W 1,377,673 W 1,042,957
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
31
12. Investment in Associates, Joint Venture and Subsidiaries, Continued
(1) Investment in subsidiaries as of December 31, 2012 and 2011 are summarized as follows, continued:
(*1) The Company acquired the share of Hyundai Life Insurance Co., Ltd. during 2012.
(*2) The Company and Shanghai Hyundai Mobis Automotive Parts Co., Ltd. hold 33.75% and 66.25% of stake,
respectively.
(*3) Mobis Automotive and Module Industry Trade Co. - Joint Stock Company was established on February 17,
2012.
(*4) Mobis India, Ltd. merged with Mobis India Research and Development Private Limited on October 1, 2012.
(*5) The Company and Mobis Parts CIS, LLC hold 99.00% and 1.00% of stake, respectively.
(2) Investment in associates and joint venture as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Company
Location
Business
Ownership
(%)
Carrying
amount
Ownership
(%)
Carrying
amount
Hyundai Motor Company Korea
Automobile manufacture
and sales 20.78% W 3,880,191 20.78% W 3,880,191
Hyundai Engineering &
Construction Co., Ltd.(*1) Korea
Engineering and
construction 8.73% 1,243,724 8.73% 1,243,724
Hyundai Amco Co., Ltd.(*2) Korea
Engineering and
construction 19.99% 80,843 19.99% 80,843
Hyundai Autoever Systems
Corporation Korea ERP system design and
management 20.00% 21,425 20.00% 21,425
Hyundai Powertech Co., Ltd. Korea
Manufacture and sales of
auto-parts 24.85% 132,002 24.85% 132,002
Hyundai Auto Electronics
Company Ltd (*3) Korea
Electrical and electronic
research and
development 20.00% 20,116 - -
ZF Lemfoerder Chassis
Technology Korea Co., Ltd. Korea
Manufacture and sales of
auto-parts 27.34% 4,492 27.34% 4,492
Hyundai M&Soft Korea
Development and supply
of software 25.67% 10,621 25.67% 10,621
HL Green Power Inc.(*4) Korea
Manufacture and sales of
auto-parts 51.00% 14,790 51.00% 14,790
HMC Investment Union Korea Investment union 38.89% 21,202 38.89% 21,202
Hyundai Motor Group (China)
Ltd. China Investment 20.00% 27,747 20.00% 27,747
Beijing Hyundai Mobis Parts
Co., Ltd. China Sales of auto-parts 50.00% 20,983 50.00% 20,983
Beijing Mobis Transmission
Co., Ltd.(*5) China
Manufacture and sales of
auto-parts - - 31.96% 61,433
Mobis Parts Jiangsu Yueda
Trading Co., Ltd. China Sales of auto-parts 50.00% 9,849 50.00% 9,849
W 5,487,985 W 5,529,302
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
32
12. Investment in Associates, Joint Venture and Subsidiaries, Continued
(2) Investment in associates and joint venture as of December 31, 2012 and 2011 are summarized as follows, continued:
(*1) Though the Company has below 20% of the ownership, the Company has significant influence through its
ability to appoint members of board of directors according to agreement among the stockholders.
(*2) Though the Company has below 20% of the ownership, the Company has significant influence through its
ability to participate in the financial and operating policy decisions.
(*3) The Company acquired the share of Hyundai Auto Electronics Company Ltd. during 2012.
(*4) HL Green Power Inc. was established in accordance with a joint venture agreement between the Company and
LG Chem, Ltd.
(*5) The Company sold its entire share of Beijing Mobis Transmission Co., Ltd. in 2012, and recorded gain on
disposal of investments in associates amounting to W 58,942 million.
(3) Fair value of marketable securities of associates as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Hyundai Motor Company W 10,003,372 9,751,571
Hyundai Engineering & Construction Co., Ltd. 680,383 684,270
W 10,683,755 10,435,841
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
33
13. Available-for-sale Financial Assets
Available-for-sale financial assets as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Company
Number of
shares
Ownership
(%)
Acquisition
cost
Carrying
amount
Acquisition
cost
Carrying
amount
Debt securities
Local development bonds - - W 7 7 - -
7 7 - -
Non-marketable securities
China Millennium Corporation I, Ltd. - 10.10% 2,099 2,099 2,099 2,099
China Millennium Corporation Ⅱ,
Ltd.
- 10.10% 2,089 2,089 2,089 2,089
China Millennium Corporation Ⅲ,
Ltd.
- 10.10% 4,873 4,873 4,873 4,873
Haevichi Hotel and Resort Co., Ltd. 310,000 10.00% 2,132 - 2,132 -
Global Information Technology Co.,
Ltd.
900,000 9.76% 450 450 450 450
MTComm Co., Ltd. 26,668 17.58% 200 - 200 -
The Sign Co., Ltd. 417,000 10.69% 2,085 - 2,085 -
GTWeb Korea, Inc. 2,659 5.32% 835 - 835 -
Korea Association of Automobile
Industry
83 1.28% 15 15 15 15
Mirae Asset Social Enterprise Venture
Investment
106 2.52% 106 106 106 106
The Korea Economic Daily 531,090 2.84% 2,656 2,656 2,656 2,656
Hyundai Partecs Company., Ltd. 1,040,000 13.00% 5,200 5,200 5,200 5,200
ZF Sachs Korea Co., Ltd. 908,960 8.55% 635 635 635 635
Daewoo Motor Co., Ltd. 2,569 - - - - -
Haevichi Country Club Ltd. 450,000 15.00% 2,274 - 2,274 -
Daewoo Automobiles trust instrument - - 16 16 44 44
Mediazen Co., Ltd. 209,339 7.22% 2 2 2 2
Easy Move Co., Ltd. 32,026 7.79% 321 321 187 187
SB Telcom Co., Ltd. 100,965 0.79% - - - -
25,988 18,462 25,882 18,356
Marketable securities
Hyundai Development Co., Ltd. 437,500 0.58% 8,775 9,472 8,775 7,350
HMC Investment Securities Co., Ltd. 4,623,587 15.76% 114,045 65,655 114,045 59,182
Hyundai Merchant Marine Co., Ltd. 61,642 0.04% 1,402 1,455 1,402 1,547
Ssangyong Motor Co., Ltd. 60,127 0.05% 451 319 451 306
Enova Systems, Inc. 80,000 0.18% 90 1 90 16
124,763 76,902 124,763 68,401
W 150,758 95,371 150,645 86,757
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured are recorded at acquisition cost.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
34
14. Other Non-current Assets
Other non-current assets as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Derivative financial assets W 21,382 2,636
Long-term financial instruments 23 29,023
Deposits provided 26,387 31,598
Guarantee deposits 8,291 9,286
Long-term accounts and notes receivable - trade 534 439
W 56,617 72,982
15. Trade and Other Payables
Trade and other payables as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Accounts and notes payable - trade W 1,993,562 1,940,489
Accounts and notes payable - other 340,819 290,501
W 2,334,381 2,230,990
Trade and other payables to related parties as of December 31, 2012 and 2011 are W 687,475 million and W 588,675
million, respectively.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
35
16. Other Liabilities
Other liabilities as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Other current liabilities
Accrued payroll W 17,063 16,690
Accrued expenses 51,207 47,448
Advance from customers 102,974 67,870
Withholdings 9,689 10,156
Withholdings tax 687 810
Withholding deposits 16,730 16,236
Liability for payment guarantee 1,045 982
Financial derivative liabilities 3,965 18,037
203,360 178,229
Other non-current liabilities
Financial derivative liabilities 459 25,993
459 25,993
W 203,819 204,222
17. Provision for Warranties
Changes in provision for warranties for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Beginning of the year W 97,478 120,908
Increase 77,405 38,041
Utilization (63,083) (61,471)
End of the year W 111,800 97,478
Less: current provision for warranties (58,235) (49,350)
Non-current provision for warranties W 53,565 48,128
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
36
18. Bonds and Borrowings
(1) Bonds and short-term borrowings as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Current Non-current Current Non-current
Bonds W 99,919 - 199,981 99,762
Short-term borrowings 1,058,854 - 1,511,153 -
W 1,158,773 - 1,711,134 99,762
(2) Short-term borrowings as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) Lender
Annual
interest rate 2012
2011
Discounted accounts
receivable
Korea Exchange Bank
and other
3M LIBOR + 0.75%
and other W 1,058,854 1,511,153
(3) Bonds as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won)
Annual
interest rate Date of issue
Maturity 2012
2011
The 142nd unsecured bond 7.08% 2009.1.23 2012.1.23 W - 200,000
The 143rd unsecured bond 4.69% 2010.6.30 2013.6.30 100,000 100,000
100,000 300,000
Less: discount (81) (257)
Less: current portion of bonds (99,919) (199,981)
W - 99,762
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
37
19. Employee Benefits
(1) Defined benefit liabilities as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Present value of defined benefit obligations W 332,190 244,960
Transfer to national pension fund (309) (319)
Fair value of plan assets (250,228) (189,221)
Defined benefit liabilities W 81,653 55,420
(2) Changes in present value of defined benefit obligations for the years ended December 31, 2012 and 2011 are
summarized as follows:
(In millions of won) 2012 2011
Beginning balance W 244,960 228,900
Current service costs 42,109 35,926
Interest costs 11,374 12,491
Actuarial losses 41,253 15,601
Increase due to transfers between affiliates 181 73
Benefit paid by the plan (7,687) (48,031)
Ending balance W 332,190 244,960
(3) Changes in fair value of plan assets for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Beginning balance W 189,221 164,639
Expected returns on plan assets 8,203 6,306
Actuarial gains 1,043 1,886
Contribution paid into the plan 55,233 41,456
Increase due to transfers between affiliates 39 55
Benefit paid by the plan (3,511) (25,121)
Ending balance W 250,228 189,221
(4) The components of plan assets as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Time deposits W 158,766 120,160
Insurance contract of guaranteed interest 91,462 69,046
Insurance contract of dividend and linkage interest rate - 15
W 250,228 189,221
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
38
19. Employee Benefits, Continued
(5) The components of retirement benefit costs for the years ended December 31, 2012 and 2011 are summarized as
follows:
(In millions of won) 2012 2011
Current service costs W 42,109 35,926
Interest costs 11,374 12,491
Expected returns on plan assets (8,203) (6,306)
W 45,280 42,111
Total expenses for retirement benefit costs for the year ended December 31, 2012 consist of W 7,584 million
recorded as cost of sales, W 27,050 million as selling, general and administrative expenses (excluding research
and development expense) and W 10,646 million as research and development expenses. The actual return on
plan assets is W 9,246 million for the year 2012 and the Company expects to pay contribution into the plan
amounting to approximately W 79,274 million for the year 2013.
(6) Historical information for the amounts related to defined benefit plans recognized for the current year and previous
years are as follows:
(7) Principal actuarial assumptions used as of December 31, 2012 and 2011 are summarized as follows:
2012 2011
Discount rate at December 31 3.93% 4.77%
Rate of expected return on plan assets at January 1 4.39% 3.99%
Rate of future salary increases 5.00% 5.00%
The discount rate is the market yield at the end of the reporting period on high quality corporate bonds that have
maturity approximating the terms of the Company’s obligations and that are denominated in the same currency
in which the benefits are expected to be paid. Rate of expected return on plan assets is estimated based on
historical data.
(In millions of won)
December 31,
2012
December 31,
2011
December 31,
2010
January 1,
2010
Defined benefit obligation W 332,190 244,960 228,900 179,662
Plan assets 250,228 189,221 164,639 138,881
Deficit 81,962 55,739 64,261 40,781
Actuarial losses on defined benefit
obligations (41,253) (15,601) (26,178) -
Actuarial gains (losses) on plan assets 1,043 1,886 (739) -
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
39
20. Derivatives Financial Instruments
The Company entered into financial derivative contracts to manage the exposure to changes in currency exchange rates
for foreign currency receivables. The Company transfers contracted amounts of foreign currency to a counter party
(financial institutions) at the maturity date, and receives in Korean won translated using the contracted exchange rate.
Financial derivative contracts as of December 31, 2012 are summarized as follows:
(In millions of foreign currency)
Currency Amount Strike Price in won Maturity
USD 1,115 1,085 ~ 1,190 January 31, 2013 ~ December 31, 2018
EUR 300 1,391 ~ 1,599 January 31, 2013 ~ December 30, 2014
JPY 7,307 14.10 ~ 15.04 January 31, 2013 ~ December 28, 2017
The Company recognized unrealized gains and losses on valuation of the financial derivatives in profit or loss
amounting to W 10,535 million and W 8,645 million, respectively, for the year ended December 31, 2012, and
recorded unrealized gains and losses on valuation of the financial derivatives (before income tax effect) amounting to
W 70,019 million and W 3,729 million, respectively, as other equity as of December 31, 2012.
21. Stockholders’ Equity
(1) The Company’s capital stock as of December 31, 2012 and 2011 are summarized as follows:
2012 2011
Common
stock Preferred stock
Common
stock
Preferred
stock
Authorized number of shares 275,000,000 25,000,000 275,000,000 25,000,000
Par value per share in won W 5,000 5,000 5,000 5,000
Issued number of shares 97,343,863 25,458 97,343,863 25,458
Capital stock in millions of won W 490,969 127 490,969 127
Pursuant to Articles of Incorporation, the Company is authorized to issue shares of non-voting preferred stock up to 25
million shares. In case the Company is not able to pay the agreed additional dividends for preferred stock, the
preferred shareholders are given the voting rights from the date of the general shareholders’ meeting which approves
the suspension of dividends to preferred stock, to the date of the general shareholders’ meeting which approves the
resumption of the dividends to preferred stock.
As approved by the Board of Directors on March 15, 2003, the Company retired 850,000 treasury shares with a gain
of ₩18,813 million. Accordingly, the number of shares issued has been decreased but the amount of paid up
capital stock has not been affected.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
40
21. Stockholders’ Equity, Continued
(2) Capital surplus as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Additional paid-in capital W 1,283,312 1,283,312
Revaluation reserve 27,664 27,664
Other capital surplus 74,767 74,767
W 1,385,743 1,385,743
22. Treasury Stock
The Company acquires treasury stocks for price stabilization, stock dividends, and exercise of appraisal rights of
dissenting shareholders at the time of merge. The Company plans to retire the shares depending on the market
conditions. Changes in treasury stock for the years ended December 31, 2012 and 2011 are summarized as follows.
(In millions of won, except share information) 2012 2011
Number of
shares
Carrying
amount
Number of
shares
Carrying
amount
Beginning balance 1,806,615 W 121,688 1,943,319 W 130,896
Purchase 1 - 5 1
Issuance - - (136,709) (9,209)
Ending balance 1,806,616 W 121,688 1,806,615 W 121,688
23. Other Equity
Other equity as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Other capital adjustments W (20,742) (20,742)
Unrealized gain on valuation of available-for-sale financial
assets 568 110
Unrealized loss on valuation of available-for-sale financial
assets (36,847) (42,832)
Unrealized gain on valuation of financial derivative assets 53,074 11,882
Unrealized loss on valuation of financial derivative assets (2,826) (35,738)
W (6,773) (87,320)
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
41
24. Retained Earnings
(1) Retained earnings as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Legal reserve W 231,039 214,315
Voluntary reserve 9,211,866 7,907,866
Unappropriated retained earnings 2,221,344 1,488,532
W 11,664,249 9,610,713
(2) Legal reserve
The Korean Commercial Code requires the Company to appropriate a legal reserve in an amount equal to at least
10% of cash dividends for each accounting period until the reserve equals 50% of stated capital. The legal reserve
may be used to reduce a deficit or may be transferred to common stock in connection with a free issue of shares.
(3) Voluntary reserve
Under the Special Tax Treatment Control Law, the Company appropriates a certain portion of retained earnings,
pursuant to a shareholder resolution, as a voluntary reserve. This reserve may be reversed and transferred to
unappropriated retained earnings by the resolution of shareholders, and be distributed as dividends after its
reversal.
(4) Statements of appropriation of retained earnings for the years ended December 31, 2012 and 2011 are as follows:
Date of Appropriation for 2012: March 15, 2013
Date of Appropriation for 2011: March 16, 2012
(In millions of won) 2012 2011
Unappropriated retained earnings
Balance at beginning of year W 572 (243,814)
Actuarial losses (30,480) (10,396)
Profit for the year 2,251,252 1,742,742
2,221,344 1,488,532
Transfers from voluntary reserves
Reserve for research and human resource development 106,330 6,000
106,330 6,000
Appropriation of retained earnings
Legal reserve 14,509 16,724
Voluntary reserve 2,131,000 1,310,000
Dividends 181,571 167,236
2,327,080 1,493,960
Unappropriated retained earnings to be carried over to subsequent
year W 594 572
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
42
25. Dividends
(1) Dividends for the years ended December 31, 2012 and 2011 are as follows:
(In millions of won, except share
information and ratio)
2012 2011
Common
stock
Preferred
stock Total
Common
stock
Preferred
stock Total
Number of shares 95,537,247 25,458 95,562,705 95,537,248 25,458 95,562,706
Par value per share in won 5,000 5,000 - 5,000 5,000 -
Dividends as a percentage of par
value 38.0% 39.0% - 35.0% 36.0% -
Cash dividends W 181,521 50 181,571 167,190 46 167,236
(2) Dividends as a percentage of net income for the years ended December 31, 2012 and 2011 are as follows:
(In millions of won, except for ratio) 2012 2011
Dividend amount W 181,571 167,236
Profit for the year 2,251,252 1,742,742
Dividend as a percentage of net income 8.10% 9.60%
(3) Dividend yield ratio for the years ended December 31, 2012 and 2011 are as follows:
(In won, except for ratio) 2012 2011
Common
stock
Preferred
stock
Common
stock
Preferred
stock
Dividend per share W 1,900 1,950 1,750 1,800
Market price at the end of year 288,000 105,000 292,000 148,000
Dividend yield ratio 0.66% 1.86% 0.60% 1.22%
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
43
26. Revenue
Revenue for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Sales of merchandise (domestic) W 2,695,590 2,583,877
Sales of merchandise (overseas) 6,842,882 6,244,260
Sales of finished goods (domestic) 2,547,897 2,425,309
Sales of finished goods (overseas) 4,779,325 4,632,755
W 16,865,694 15,886,201
27. Nature of Expenses
Details of nature of expenses for the years ended December 31, 2012 and 2011 are as follows:
(In millions of won) 2012 2011
Changes in inventories and purchase of merchandise W 4,974,600 4,641,062
Raw material consumed 7,434,900 7,190,385
Employee benefits expense 707,864 640,710
Depreciation and amortization 193,661 177,265
Freight 302,530 290,497
Advertising 51,132 52,840
Others 888,641 754,600
W 14,553,328 13,747,359
Total amount is the sum of cost of sales and selling, general, and administrative expenses in separate statement of
income.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
44
28. Selling, General and Administrative Expenses
Selling, general and administrative expenses for the years ended December 31, 2012 and 2011 are summarized as
follows:
(In millions of won) 2012 2011
Salaries W 296,593 270,472
Retirement benefits 27,050 23,989
Other employee benefits 59,277 52,711
Service fees 107,759 95,333
Research and development costs 359,099 319,987
Depreciation and amortization 43,695 47,025
Advertising 51,132 52,840
Transportation 75,377 66,659
Rent 15,897 15,679
Supplies expense 6,248 7,718
Office and IT maintenance 35,771 32,317
Others 54,829 41,855
W 1,132,727 1,026,585
29. Other Income and Expense
Other income and expense for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Other income:
Foreign exchange transaction gain W 56,192 106,527
Foreign exchange translation gain 4,789 21,197
Gain on sale of property, plant and equipment 938 547
Reversal of allowance for doubtful accounts 98 2,323
Realized gain of financial derivatives 35,644 22,738
Unrealized gain of financial derivatives 10,535 6,275
Miscellaneous gain 28,007 28,184
136,203 187,791
Other expense:
Foreign exchange transaction loss 125,296 105,465
Foreign exchange translation loss 25,598 21,134
Donation 13,263 15,599
Loss on sale of accounts and notes receivable – trade 1,788 -
Loss on sale of property, plant and equipment 1,376 1,594
Loss on sale of intangible assets 14 -
Loss on sale of investment property 369 -
Impairment loss on intangible assets 890 404
Realized loss of financial derivatives 7,733 19,433
Unrealized loss of financial derivatives 8,645 7,906
Miscellaneous loss 2,592 380
187,564 171,915
Net other income (expense): W (51,361) 15,876
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
45
30. Financial Instruments Related Income and Expense
(1) Financial instruments related income and expense classified as other income and other expense for the years ended
December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Other income:
Foreign exchange transaction gain W 56,192 106,527
Foreign exchange translation gain 4,789 21,197
Realized gain of financial derivatives 35,644 22,738
Unrealized gain of financial derivatives 10,535 6,275
107,160 156,737
Other expense:
Foreign exchange transaction loss 125,296 105,465
Foreign exchange translation loss 25,598 21,134
Loss on sale of accounts and notes receivable – trade 1,788 -
Realized loss of financial derivatives 7,733 19,433
Unrealized loss of financial derivatives 8,645 7,906
169,060 153,938
W (61,900) 2,799
(2) Financial instruments related income and expense classified as finance income and finance expense for the years
ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Finance income:
Interest income W 125,533 79,378
Dividend income 338,546 109,786
Foreign exchange transaction gain 125,726 119,731
Foreign exchange translation gain 19,200 19,084
609,005 327,979
Finance expense:
Interest expense 25,361 38,676
Foreign exchange transaction loss 64,988 135,336
Foreign exchange translation loss 1,726 17,586
Loss on sale of available-for-sales financial assets 16 59
92,091 191,657
W 516,914 136,322
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
46
30. Financial Instruments Related Income and Expense, Continued
(3) Categories of finance income and expense for the years ended December 31, 2012 and 2011 are summarized as follows:
① For the year ended December 31, 2012
(In millions of won)
Financial assets
at fair value
through profit
or loss
Held-to-
maturity
investments
Loans and
receivables
Available-
for-sale
financial
assets
Investment in
associates and
subsidiaries
Financial
liabilities
measured at
amortized cost
Derivatives
financial
instruments Total
Recognized in profit or loss:
Interest income W - - 125,533 - - - - 125,533
Dividends income - - - 430 338,116 - - 338,546 Foreign exchange
transaction gain - - 65,234 - - 116,684 - 181,918 Foreign exchange
translation gain - - 2,151 - - 21,838 - 23,989 Realized gain of financial
derivatives - - - - - - 35,644 35,644 Unrealized gain of
financial derivatives - - - - - - 10,535 10,535
Interest expense - - - - - (25,361) - (25,361) Foreign exchange
transaction loss - - (156,376) - - (33,908) - (190,284) Foreign exchange
translation loss - (25,418) (1,906) - (27,324) Loss on sale of accounts
and notes receivable –
trade - - (1,788) - - - - (1,788) Loss on sale of
available-for-sales
financial assets - - - (16) - - - (16) Realized loss of financial
derivatives - - - - - - (7,733) (7,733) Unrealized loss of
financial derivatives - - - - - - (8,645) (8,645)
W - - 9,336 414 338,116 77,347 29,801 455,014
Finance income - - 192,918 430 338,116 138,522 46,179 716,165
Finance expense W - - (183,582) (16) - (61,175) (16,378) (261,151)
Recognized in other comprehensive income: Unrealized gain on
valuation W - - - 6,443 - - 74,104 80,547
- - - 6,443 - - 74,104 80,547
W - - 9,336 6,857 338,116 77,347 103,905 535,561
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
47
30. Financial Instruments Related Income and Expense, Continued
(2) Categories of finance income and expense for the years ended December 31, 2012 and 2011 are summarized as follows,
continued:
② For the year ended December 31, 2011
(In millions of won)
Financial assets
at fair value
through profit
or loss
Held-to-
maturity
investments
Loans and
receivables
Available-
for-sale
financial
assets
Investment in
associates and
subsidiaries
Financial
liabilities
measured at
amortized cost
Derivatives
financial
instruments Total
Recognized in profit or loss:
Interest income W - - 79,378 - - - - 79,378
Dividends income - - - 341 109,445 - - 109,786 Foreign exchange
transaction gain - - 141,875 - - 84,383 - 226,258 Foreign exchange
translation gain - - 20,304 - - 19,977 - 40,281 Realized gain of financial
derivatives - - - - - - 22,738 22,738 Unrealized gain of
financial derivatives - - - - - - 6,275 6,275
Interest expense - - - - - (38,676) - (38,676) Foreign exchange
transaction loss - - (142,425) - - (98,376) - (240,801) Foreign exchange
translation loss - - (19,657) - - (19,063) - (38,720) Loss on sale of accounts
and notes receivable –
trade - - - - - - - - Loss on sale of
available-for-sales
financial assets - - - (59) - - - (59) Realized loss of financial
derivatives - - - - - - (19,433) (19,433) Unrealized loss of
financial derivatives - - - - - - (7,906) (7,906)
W - - 79,475 282 109,445 (51,755) 1,674 139,121
Finance income - - 241,557 341 109,445 104,360 29,013 484,716
Finance expense W - - (162,082) (59) - (156,115) (27,339) (345,595)
Recognized in other comprehensive loss : Unrealized loss on
valuation W - - - (35,804) - - (30,899) (66,703)
- - - (35,804) - - (30,899) (66,703)
W - - 79,475 (35,522) 109,445 (51,755) (29,225) 72,418
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
48
31. Income Taxes
(1) The component of income tax expense for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Current tax expense W 523,251 424,321
Adjustment for prior periods 393 (2,443)
Origination and reversal of temporary differences 22,879 80,611
Income tax recognized in other comprehensive income (15,985) 16,368
Foreign taxes and others 55,071 29,441
Total income tax expense W 585,609 548,298
(2) Income taxes recognized directly in other comprehensive income for the years ended December 31, 2012 and 2011
are summarized as follows:
(In millions of won) 2012 2011
Current income tax:
Gain on sale of treasury stock W - (8,458)
- (8,458)
Deferred income tax:
Loss (gain) on valuation of available-for-sale
financial assets
(2,057) 11,689
Loss (gain) on valuation of derivative instruments (23,658) 9,818
Actuarial losses 9,730 3,319
(15,985) 24,826
Income tax recognized directly in other
comprehensive income W (15,985) 16,368
Income tax related to gain on sale of treasury stock was recognized directly in equity and income tax related to
actuarial loss (gain), loss (gain)on valuation of available-for-sale financial assets and loss (gain) on valuation of
derivative instruments were recognized in other comprehensive income.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
49
31. Income Taxes, Continued
(3) Reconciliation of effective tax rate for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won, except for ratio) 2012 2011
Profit before income taxes W 2,836,861 2,291,040
Statutory tax rate 24.20% 24.20%
Income tax using statutory tax rate 686,520 554,432
Adjustment for:
Non-taxable income and non-tax deductible expense (6,367) (5,720)
Tax credits (165,520) (85,293)
Current adjustments for prior periods 393 (2,443)
Foreign taxes 55,071 29,441
Others 15,512 57,881
(100,911) (6,134)
Income tax expenses W 585,609 548,298
Average effective tax rate 20.64% 23.90%
(4) Deferred tax expenses by origination and reversal of deferred tax assets and liabilities for the years ended
December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012
2011
Deferred tax liabilities as of the end of the period W 613,131
590,252
Deferred tax liabilities as of the beginning of the period
590,252
509,641
Deferred tax expenses by origination and reversal of
temporary differences W 22,879
80,611
(5) As of December 31, 2012, the tax effects of temporary differences were calculated by using 24.2%, the expected
future tax rate for the fiscal years when the temporary differences are expected to be reversed.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
50
31. Income Taxes, Continued
(6) Changes in deferred tax assets and liabilities for the years ended December 31, 2012 and 2011 are summarized as
follows:
① For the year ended December 31, 2012
(In millions of won)
Beginning
balance
Profit
(loss)
Other
comprehensive
income Ending balance
Land W (97,460) 1,252 - (96,208)
Investment in subsidiaries and
associates
(316,833) 27,558 - (289,275)
Defined benefit liabilities (112) (5,040) 9,730 4,578
Depreciation (7,657) 2,016 - (5,641)
Valuation of derivative instruments 7,616 - (23,658) (16,042)
Reserve for research and
development
(227,236) (37,188) - (264,424)
Valuation of available-for-sale
financial assets
13,640 - (2,057) 11,583
Impairment losses on
available-for-sale financial assets
8,589 - - 8,589
Allowance for valuation of
inventories
4,505 (506) - 3,999
Provision for warranties 23,590 3,466 - 27,056
Others 1,106 1,548 - 2,654
W (590,252) (6,894) (15,985) (613,131)
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
51
31. Income Taxes, Continued
(6) Changes in deferred tax assets and liabilities for the years ended December 31, 2012 and 2011 are summarized as
follows, continued:
② For the year ended December 31, 2011
(In millions of won)
Beginning
balance
Profit
(loss)
Other
comprehensive
income Ending balance
Land W (88,600) (8,860) - (97,460)
Investment in subsidiaries and
associates
(292,230) (24,603) - (316,833)
Defined benefit liabilities (1,151) (2,280) 3,319 (112)
Depreciation (8,816) 1,159 - (7,657)
Valuation of derivative instruments (2,202) - 9,818 7,616
Reserve for research and
development
(161,830) (65,406) - (227,236)
Valuation of available-for-sale
financial assets
1,951 - 11,689 13,640
Impairment losses on
available-for-sale financial assets
7,808 781 - 8,589
Allowance for valuation of
inventories
5,500 (995) - 4,505
Provision for warranties 28,473 (4,883) - 23,590
Others 1,456 (350) - 1,106
W (509,641) (105,437) 24,826 (590,252)
(7) Deferred income tax assets and liabilities are offset as there is a legally enforceable right to offset current tax assets
against current tax liabilities and the deferred income tax assets and liabilities relate to income taxes levied by same
taxation authority.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
52
32. Earnings per Share
(1) Basic earnings per share for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won, except share information) 2012 2011
Profit for the year W 2,251,252 1,742,742 Dividends on preferred stock (50) (46) Additional income available for dividends allocated to preferred
stock (551) (420)
Net income attributable to common stocks 2,250,651 1,742,276 Weighted average number of common shares outstanding(*) 95,537,248 95,423,761 Earnings per share in won W 23,558 18,258
(*) Weighted average number of common shares outstanding:
(In shares) 2012 2011
Weighted average number of common shares issued 97,343,863 97,343,863
Weighted average number of treasury stock (1,806,615) (1,920,102)
Weighted average number of common shares
outstanding at December 31 95,537,248 95,423,761
(2) Diluted earnings per share
Diluted earnings per share are not calculated for the years ended December 31, 2012 and 2011, because there are no
dilutive shares as of December 31, 2012 and 2011.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
53
33. Transactions and Balances with Related Parties
(1) Subsidiaries as of December 31, 2012 are summarized as follows:
Location Company
Korea Hyundai IHL Co., Ltd.
Korea Hyundai Life Insurance Co., Ltd.
China Beijing Hyundai Mobis Automotive Parts Co., Ltd.
China Jiangsu Mobis Automotive Parts Co., Ltd.
China Wuxi Mobis Automotive Parts Co., Ltd.
China Shanghai Hyundai Mobis Automotive Parts Co., Ltd.
China Hyundai Motor (Shanghai) Co., Ltd.
China Beijing Mobis Chonche Automotive Parts Co., Ltd.
China Tianjin Mobis Automotive Parts Co., Ltd.
Hongkong Hyundai Mobis (Hongkong) Co., Limited.
USA Mobis America Inc.
USA Mobis Alabama, LLC
USA Mobis Parts America, LLC
USA American Autoparts, Inc.
USA Mobis North America, LLC
Brazil Mobis Brasil Fabricacao De Auto Pecas Ltda
Belgium Mobis Parts Europe N.V.
Russia Mobis Parts CIS, LLC
Russia Mobis Module CIS, LLC
Slovakia Mobis Slovakia s.r.o.
Czech Mobis Automotive Czech s.r.o.
Turkey Mobis Automotive and Module Industry Trade Co. - Joint Stock Company
UAE Mobis Parts Middle East FZE
Egypt Mobis Auto Parts Middle East Egypt
India Mobis India, Ltd.
Australia Mobis Parts Australia PTY., Ltd.
(2) Transactions which occurred in the normal course of business of the Company with related parties for the years ended
December 31, 2012 and 2011 are as follows:
(In millions of won) Sales and other income Purchase and other expense
2012 2011 2012 2011
Associates and joint venture W 4,491,548 4,413,342 1,251,334 1,329,617
Subsidiaries 5,040,188 4,634,855 402,932 352,034
Others 4,315,298 3,857,273 973,672 1,006,671
W 13,847,034 12,905,470 2,627,938 2,688,322
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
54
33. Transactions and Balances with Related Parties, Continued
(3) Account balances of the Company with related parties as of December 31, 2012 and 2011 are as follows:
(In millions of won) Receivables Payables
2012 2011 2012 2011
Associates and joint venture W 971,188 906,946 350,093 288,187
Subsidiaries 1,253,294 1,522,393 103,594 90,658
Others 946,352 820,773 233,788 209,830
W 3,170,834 3,250,112 687,475 588,675
(4) The Company has financial instrument investment amounting to W 160,000 million at HMC investment securities
Co., Ltd. as of December 31, 2012.
(5) The Company has provided payment guarantees for related parties as of December 31, 2012 (note 34).
(6) Executive compensation of the Company for the years ended December 31, 2012 and 2011 are summarized as
follows:
(In millions of won) 2012 2011
Short-term employee benefits W 31,176 28,691
Retirement benefits 8,551 9,699
W 39,727 38,390
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
55
34. Commitments and Contingencies
(1) As of December 31, 2012, the Company is provided with guarantees by Korea Exchange Bank and other financial
institutions, amounting to W 6,260 million (2011: W 7,623 million) and USD 25,346 thousand (2011: USD 25,435
thousand).
(2) As of December 31, 2012, the Company has provided payment guarantees amounting to W 440,476 million (2011:
W 403,477 million) and USD 1,375,590 thousand (2011: USD 1,350,783 thousand) for various borrowings and
business transactions of related parties.
(3) As of December 31, 2012, the Company has been named as a defendant in eight pending litigations. The
aggregate amount of claims amounted to approximately W 2,560 million. The ultimate effect of these cases
cannot be presently determined. No provision for potential losses arising from these cases has been reflected in
the accompanying separate financial statements.
(4) The Company acquired the shares of Hyundai Engineering & Construction Co., Ltd. along with terms of a contract
that the Company is prohibited from selling the shares, offering it as collateral or split for two years from April 1,
2011, the date of acquisition. 1,565,678 shares of the Company, which is 10% of the acquisition value, were
deposited in an escrow account as guarantee for execution of the contract.
(5) As of December 31, 2012, the Company has entered into contracts for the development of new technology related
to airbags, audio and others with 27 companies including Bosch and Dolby. In connection with these contracts,
the Company recognized royalty expense amounting to W 34,192 million and W 31,298 million for the years
ended December 31, 2012 and 2011, respectively.
(6) As of December 31, 2012, the Company entered into bank overdraft agreements for borrowings up to W 226,000
million with Korea Exchange Bank and others, and also entered into general term loan agreements up to W
150,000 million with Standard Chartered First Bank Korea Ltd. and others. The Company has accommodation
note discounting agreements of up to W 19,000 million with Citibank Korea Inc. and others, and has agreement to
open letters of usance credit up to USD 60,000 thousand and W 8,000 million with Korea Exchange Bank and
others. In addition, the Company has agreements with Korea Exchange Bank and others to open documents
against acceptance and documents against payment up to USD 2,282,610 thousand and W 212,400 million,
respectively. Further, the Company has an agreement with Korea Exchange Bank and others for the trade
receivable-collateralized loans without recourse for up to W 400,000 million and has an agreement with Hana
Bank and others for the buy-back card for up to W 190,000 million.
(7) The Company has provided guarantee for fulfilment of a contract of Mobis North America, LLC with Daimler
Chrysler for long-term auto parts supply and land-rent, as approved by the Board of Directors on April 28, 2005.
Mobis North America, LLC is the entity invested by the Company, with the purpose of production and supply of
auto parts to the factory of Daimler Chrysler in Toledo.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
56
35. Separate Statements of Cash Flows
(1) Cash generated from operations for the years ended December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Profit for the year W 2,251,252 1,742,742
Adjustments for:
Salaries - 44,156
Retirement benefits 45,280 42,111
Accrual for warranties 77,405 38,041
Depreciation 173,471 151,156
Amortization 18,496 24,415
Depreciation of investment property 1,694 1,694
Bad debts expense - 700
Interest expense 25,361 38,676
Income tax expense 585,609 548,298
Foreign currency translation loss (gain), net 3,335 (1,561)
Gain on disposal of investments in associates and subsidiaries (58,942) -
Loss on sale of available-for-sale financial assets 16 59
Loss on sale of property, plant and equipment, net 438 1,047
Impairment loss on intangible assets 890 404
Interest income (125,533) (79,378)
Dividends income (338,546) (109,786)
Reversal of allowance for doubtful accounts (162) (2,323)
Loss (gain) on valuation of financial derivatives, net (1,890) 1,631
Others 383 153
407,305 699,493
Changes in assets and liabilities:
Accounts and notes receivable - trade 46,238 (639,681)
Other receivables (44,227) 3,535
Inventories (9,263) (73,428)
Other current assets 2,462 (3,887)
Other non-current assets (2,207) (442)
Accounts and notes payable - trade 54,907 83,764
Other payables 50,939 57,683
Provision for warranties (63,083) (61,471)
Other current liabilities 31,526 7,695
Other non-current liabilities 1,755 (232)
Payment of retirement benefits (7,687) (48,031)
Benefit plan assets (51,571) (16,220)
9,789 (690,715)
Cash generated from operations W 2,668,346 1,751,520
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
57
35. Separate Statements of Cash Flows, Continued
(2) Significant non-cash investing and financing activities for the years ended December 31, 2012 and 2011 are
summarized as follows:
(In millions of won) 2012 2011
Transfer of construction-in-progress W 283,654 78,557
Reclassification of current portion of bonds 99,919 199,981
W 383,573 278,538
36. Risk Management
The Company’s activities are exposed to a variety of financial risks: market risk (comprised of foreign exchange risk,
price risk and interest rate risk), credit risk and liquidity risk. The Company monitors and manages the financial risk
arising from the Company’s underlying operations in accordance with the risk management policies and programs.
Financial risk management is carried out for the Company's financial assets (cash and cash equivalents, short-term
financial assets available-for-sale financial assets, and trade and other receivables) and financial liabilities (trade and
other payables, borrowings and bonds).
(1) Market risk
① Foreign exchange risk
The Company is exposed to foreign exchange risk arising from export in sales and import in purchases amount, which
is denominated in foreign currencies. The Company’s primary exposure is related to changes in exchange rates for
the US Dollars and Euro and the Company manages to minimize financial risk on fluctuations in foreign exchange in
order to stabilize operating activities.
The Company is exposed to foreign exchange risk arising from various currency exposures. As of December 31,
2012 and 2011, if the Company’s functional currency had weakened / strengthened by 10% against foreign currencies
with all other variables held constant, profit before income taxes for the year would have been affected as follows:
(In millions of won) 2012 2011
10% Up 10% Down 10% Up 10% Down
Profit before income taxes W 20,461 (20,461) (601) 601
② Price risk
The Company’s activities are exposed to price risk related to marketable securities by changes of market price.
Marketable financial instruments as of December 31, 2012 and 2011 are as follows:
(In millions of won) 2012 2011
Available-for-sale financial assets W 76,909 68,401
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
58
36. Risk Management, Continued
(1) Market risk, continued
③ Interest rate risk
The purpose of the Company's interest rate risk management is to mitigate the interest rate risk and minimize the net
interest expense, further to optimize the enterprise value. Interest rate risk is the risk that interest income and interest
expense from deposits and borrowings fluctuate, according to the fluctuation of future interest rate in market. Interest
rate risk is mostly originated from floating rate deposits and borrowings. Since the Company manages the interest rate
risk only by using fixed rate financial instruments, changes in interest rate does not affect the Company’s profit.
(2) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Company’s receivables from customers and
investment securities. To manage credit risks relating to trade receivables, the Company evaluates the credit rating
of customers and determines credit limit for each customer based on the information provided by credit rating
agencies and other available financial information before commencing business with customers.
Credit risk is borne by not only the credit risk arisen by customers with receivables and firm contracts but cash and
cash equivalent, financial derivatives, bank deposit, and financial institution deposit. For the purpose of lowering the
credit risk, the Company has transactions only with the financial institutions with high credit rating. The book value
of financial assets means maximum exposure in respect of credit risk.
The book value of financial assets means maximum exposure in respect of credit and counterparty risk. The
maximum exposure as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won) 2012 2011
Cash and cash equivalent (*) W 662,887 1,186,198
Short-term financial instruments 2,964,000 1,210,000
Trade and other receivables 3,874,047 3,921,600
Other current assets 76,584 24,521
Available-for-sale financial assets 95,371 86,757
Other non-current assets 56,617 72,982
W 7,729,506 6,502,058
(*) Cash on hand is excluded.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
59
36. Risk Management, Continued
(3) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Company maintains adequate
sources of liquidity to settle short-term financial liabilities by periodic analysis of expected cash outflows.
The contractual maturities of financial liabilities as of December 31, 2012 and 2011 are summarized as follows:
① As of December 31, 2012
(In millions of won)
Carrying
amount
Contractual
cash flows
Within
1 year 1~5 years
Non-derivative financial liabilities
Current portion of long-term debt
and short-term borrowings W 1,158,773 1,158,854 1,158,854 -
Trade and other payables 2,334,381 2,334,381 2,334,381 -
Other current liabilities 85,000 85,000 85,000 -
Liability for payment guarantee 1,045 1,473,394 757,403 715,991
3,579,199 5,051,629 4,335,638 715,991
Derivative financial liabilities
Derivative financial liabilities 4,424 4,424 3,965 459
4,424 4,424 3,965 459
W 3,583,623 5,056,053 4,339,603 716,450
② As of December 31, 2011
(In millions of won)
Carrying
amount
Contractual
cash flows
Within
1 year 1~5 years
Over
5 years
Non-derivative financial liabilities
Bonds and long-term borrowings W 99,762 107,035 4,690 102,345 -
Current portion of long-term debt
and short-term borrowings 1,711,134 1,714,693 1,714,693 - -
Trade and other payables 2,230,990 2,230,990 2,230,990 - -
Other current liabilities 80,374 80,374 80,374 - -
Liability for payment guarantee 982 1,557,858 1,284,453 273,405 -
4,123,242 5,690,950 5,315,200 375,750 -
Derivative financial liabilities
Derivative financial liabilities 44,030 44,030 18,037 25,815 178
44,030 44,030 18,037 25,815 178
W 4,167,272 5,734,980 5,333,237 401,565 178
The above maturity analysis was prepared by using the earliest date which could be asked for repayment during the
maturity and the non-discounted free cash flows. In case of financial guarantee contracts, the analysis has been
prepared by allocating during the earliest period which could be asked to pledge the maximum amount.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
60
36. Risk Management, Continued
(4) Management of capital risk
The objectives of the Company’s capital management are to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal
capital structure to reduce the cost of capital. As for this to be maintained, the Company uses debt ratio as indicator
of capital management. The debt to equity ratio is calculated as total liability divided by total equity.
Debt to equity ratio as of December 31, 2012 and 2011 are summarized as follows:
(In millions of won, except for ratio) 2012 2011
Total liabilities W 4,827,517 5,247,910
Total equity W 13,412,627 11,278,544
Debt to equity ratio 35.99% 46.53%
(5) Categories of financial assets and liabilities as of December 31, 2012 and 2011 are summarized as follows:
① As of December 31, 2012
(In millions of won)
Financial assets
at fair value
through profit
or loss
Held-to-
maturity
investments
Loans
and
receivables
Available-
for-sale
financial
assets
Financial
liabilities
measured at
amortized
cost
Derivatives
financial
instruments Total
Financial assets
Cash and cash equivalent W - - 662,949 - - - 662,949 Short-term financial
instruments - - 2,964,000 - - - 2,964,000
Trade and other receivables - - 3,874,047 - - - 3,874,047
Other current assets - - 26,311 - - 50,273 76,584 Available-for-sale financial
assets - - - 95,371 - 95,371
Other non-current assets - - 35,235 - - 21,382 56,617
W - - 7,562,542 95,371 - 71,655 7,729,568
Financial liabilities
Trade and other payables W - - - - 2,334,381 - 2,334,381 Current portion of long-term debt and short-term
borrowings - - - - 1,158,773 - 1,158,773
Other current liabilities - - - - 86,045 3,965 90,010
Other non-current liabilities - - - - - 459 459 W - - - - 3,579,199 4,424 3,583,623
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
61
36. Risk Management, Continued
(5) Categories of financial assets and liabilities as of December 31, 2012 and 2011 are summarized as follows, continued:
② As of December 31, 2011
(In millions of won)
Financial assets
at fair value
through profit
or loss
Held-to-
maturity
investments
Loans
and
receivables
Available-
for-sale
financial
assets
Financial
liabilities
measured at
amortized
cost
Derivatives
financial
instruments Total
Financial assets
Cash and cash equivalent W - - 1,186,260 - - - 1,186,260 Short-term financial
instruments - - 1,210,000 - - - 1,210,000
Trade and other receivables - - 3,921,600 - - - 3,921,600
Other current assets - - 16,467 - - 8,054 24,521 Available-for-sale financial
assets - - - 86,757 - - 86,757
Other non-current assets - - 70,346 - - 2,636 72,982
W - - 6,404,673 86,757 - 10,690 6,502,120
Financial liabilities
Trade and other payables W - - - - 2,230,990 - 2,230,990 Current portion of long-term
debt and short-term
borrowings - - - - 1,711,134 - 1,711,134
Other current liabilities - - - - 81,356 18,037 99,393 Bonds and long-term
borrowings - - - - 99,762 - 99,762
Other non-current liabilities - - - - - 25,993 25,993 W - - - - 4,123,242 44,030 4,167,272
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
62
36. Risk Management, Continued
(6) Fair values
① The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of
financial position, as of December 31, 2012 and 2011 are as follows:
(In millions of won) 2012 2011
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Assets carried at fair value
Available-for-sale financial assets W 95,371 95,371 86,757 86,757
Derivative financial assets 71,655 71,655 10,690 10,690
167,026 167,026 97,447 97,447
Assets carried at amortized cost
Cash and cash equivalent 662,949 662,949 1,186,260 1,186,260
Short-term financial instruments 2,964,000 2,964,000 1,210,000 1,210,000
Trade and other receivables 3,874,047 3,874,047 3,921,600 3,921,600
Other current assets 26,311 26,311 16,467 16,467
Other non-current assets 35,235 35,235 70,346 70,346
7,562,542 7,562,542 6,404,673 6,404,673
W 7,729,568 7,729,568 6,502,120 6,502,120
Liabilities carried at fair value
Derivative financial liabilities W 4,424 4,424 44,030 44,030
4,424 4,424 44,030 44,030
Liabilities carried at amortized cost
Bonds and long-term borrowings - - 99,762 99,762
Current portion of long-term debt and
short-term borrowings 1,158,773 1,158,773 1,711,134 1,711,134
Trade and other payables 2,334,381 2,334,381 2,230,990 2,230,990
Other current liabilities 86,045 86,045 81,356 81,356
3,579,199 3,579,199 4,123,242 4,123,242
W 3,583,623 3,583,623 4,167,272 4,167,272
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
63
36. Risk Management, Continued
(6) Fair values, continued
② Fair value measurement classified by fair value hierarchy as of December 31, 2012 and 2011 are summarized as
follows:
(In millions of won) Level 1 Level 2 Level 3 Total
December 31, 2012
Available-for-sale financial assets W 76,909 - - 76,909
Derivative financial assets - 71,655 - 71,655
Derivative financial liabilities - (4,424) - (4,424)
W 76,909 67,231 - 144,140
December 31, 2011
Available-for-sale financial assets W 68,401 - - 68,401
Derivative financial assets - 10,690 - 10,690
Derivative financial liabilities - (44,030) - (44,030)
W 68,401 (33,340) - 35,061
(*) There had been no significant transfers between levels 1, 2, and 3.
③ Financial instruments which are measured at the cost because the fair value is not available as of December 31, 2012
and 2011 are summarized as follows:
(In millions of won) 2012 2011
Available-for-sale financial assets W 18,462 18,356
④ Financial assets and liabilities carried at fair value by each valuation method are defined as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or in indirectly
- Level 3: input for the asset or liability that are not based on observable market data
⑤ The Company measured the fair value of financial instruments as follows:
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets held by the Company is the closing bid price.
These instruments are included in level 1. Instruments included in level 1 comprise primarily listed equity
investments classified as available-for-sale financial assets.
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximize the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
HYUNDAI MOBIS CO., LTD.
Notes to the Separate Financial Statements
For the years ended December 31, 2012 and 2011
64
36. Risk Management, Continued
(6) Fair values, continued
⑤ The Company measured the fair value of financial instruments as follows, continued:
Specific valuation techniques used to value financial instruments include:
- Quoted market prices or dealer quotes for similar instruments.
- The fair value of forward foreign exchange contracts is determined using forward exchange rates at the end of
the reporting period, with the resulting value discounted back to present value.
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments. As for trade and other receivables, the book value approximates a reasonable estimate of fair value.
There are no significant changes in the business environment and economic environment, affected the fair value of
the Company's financial assets and financial liabilities for the year ended December 31, 2012.
37. Date of Authorization for Issue
The separate financial statements were authorized for issue by the Board of Directors on January 31, 2013 which
will be submitted for approval to the general meeting of stockholders to be held on March 15, 2013.
65
Independent Auditors’ Review Report on Internal Accounting Control System
English Translation of a Report Originally Issued in Korean
To the President of
HYUNDAI MOBIS Co., Ltd.:
We have reviewed the accompanying Report on the Operations of Internal Accounting Control System (“IACS”) of
HYUNDAI MOBIS Co., Ltd. (the “Company”) as of December 31, 2012. The Company's management is responsible for
designing and maintaining effective IACS and for its assessment of the effectiveness of IACS. Our responsibility is to
review management's assessment and issue a report based on our review. In the accompanying report of management’s
assessment of IACS, the Company’s management stated: “Based on the assessment on the operations of the IACS, the
Company’s IACS has been effectively designed and is operating as of December 31, 2012, in all material respects, in
accordance with the IACS Framework issued by the Internal Accounting Control System Operation Committee.”
We conducted our review in accordance with IACS Review Standards, issued by the Korean Institute of Certified Public
Accountants. Those Standards require that we plan and perform the review to obtain assurance of a level less than that of
an audit as to whether Report on the Operations of Internal Accounting Control System is free of material misstatement.
Our review consists principally of obtaining an understanding of the Company’s IACS, inquiries of company personnel
about the details of the report, and tracing to related documents we considered necessary in the circumstances. We have
not performed an audit and, accordingly, we do not express an audit opinion.
A company's IACS is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of separate financial statements for external purposes in accordance with K-IFRS. Because of its
inherent limitations, however, IACS may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on our review, nothing has come to our attention that Report on the Operations of Internal Accounting Control
System as of December 31, 2012 is not prepared in all material respects, in accordance with IACS Framework issued by
the Internal Accounting Control System Operation Committee.
This report applies to the Company’s IACS in existence as of December 31, 2012. We did not review the Company’s
IACS subsequent to December 31, 2012. This report has been prepared for Korean regulatory purposes, pursuant to the
External Audit Law, and may not be appropriate for other purposes or for other users.
February 22, 2013
Notice to Readers
This report is annexed in relation to the audit of the separate financial statements as of December 31, 2012 and the review
of internal accounting control system pursuant to Article 2-3 of the Act on External Audit Corporations of the Republic of
Korea.
66
Report on the Operations of Internal Accounting Control System
English Translation of a Report Originally Issued in Korean
To the Board of Directors and Audit Committee of
HYUNDAI MOBIS Co., Ltd.:
1. I, as the Internal Accounting Control Officer (“IACO”) of HYUNDAI MOBIS Co., Ltd. (the “Company”), have
assessed the status of the design and operations of the Company’s Internal Accounting Control System (“IACS”) as of
December 31, 2012 and the Company’s management including IACO is responsible for designing and operating IACS.
2. Major examinations on the operations of the Company’s IACS includes :
1) Report on results of the execution of IACS
2) In connection with verification of financial statements as of and for the year ended December 31, 2012, perform self
assessment test.
3. Results of the examination
1) The major examinations above properly encompassed all subjects that the Company has to include or reflect in
accordance with IACS standards of the Acts on External Audit of Corporations in the Republic of Korea and public
release certification system management to ensure the accuracy and propriety of public announcement.
2) Based on the assessment on the design and operations of the IACS, the Company’s IACS has been effectively
designed and is operating effectively as of December 31, 2012, in all material respects, in accordance with the IACS
Framework issued by the Internal Accounting Control System Operation Committee.
January 31, 2013
Choi, Byung Chul, Internal Accounting Control Officer
Jeon, Ho Seok, Chief Executive Officer